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Eastern Enlargement and EU-Labour-Markets: Perceptions, Challenges and Opportunities

Author

Listed:
  • Boeri, Tito

    () (Bocconi University)

  • Brücker, Herbert

    () (Institute for Employment Research (IAB), Nuremberg)

Abstract

This paper summarises the key findings of a recent study on the impact of Eastern Enlargement of the European Union (EU) on labour markets in the current Member States. The study focuses on three main channels, along which enlargement may affect labour markets in the EU, namely i) trade, ii) foreign direct investment, and iii) migration. A main conclusion of the study is that trade and capital movements are very unlikely to lead to an equalisation of factor prices. Thus, strong economic incentives to migration are bound to be present well beyond the date of accession. We estimate the migration potential associated with Eastern enlargement drawing on a time series model of immigration to Germany, which allows to estimate the long-term equilibrium migration potential, as well as the speed of adjustment at which the potential takes place. Our findings suggest that the long-run stock of immigrants from the CEECs-10 in the EU will increase from 0.85 in 1998 to a peak of 3.9 million persons which is expected to be reached around 30 years after the liberalisation of labour movements. Net immigration inflows in the EU are bound to increase immediately reaching a maximum of about 335,000 individuals per year, and subsequently decline to a modest 100,000 to 150,000 people per annum. Around 35% of the migrants are expected to be workers. Microeconometric exercises carried out in the context of the study indicate that such an influx of migrants will have only a moderate impact on wages and employment even in the two most affected countries, Austria and Germany. Although we are dealing with relatively small numbers, they may have an impact on wages and employment in some neighbouring regions of Austria and Germany, where immigration from the CEECs-10 is concentrated. In the final section of the paper, we argue for keeping actual migration flows from CEECs-10 under control for a transitional period. Although the chapter in the accession negotiations on the free movement of labour has been already opened, a joint position of the present EU members regarding this fundamental issue is still missing. European leaders will soon have to come to terms with this issue.

Suggested Citation

  • Boeri, Tito & Brücker, Herbert, 2001. "Eastern Enlargement and EU-Labour-Markets: Perceptions, Challenges and Opportunities," IZA Discussion Papers 256, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp256
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    Cited by:

    1. Yordan Kalchev, & Valentin Goev & Vesselin Mintchev & Venelin Boshnakov, 2004. "External Migration from Bulgaria at the Beginning of the XXI Century: Estimates of Potential Emigrants’ Attitudes and Profile," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 137-161.
    2. Seppo Kari & Jouko Ylä-Liedenpohja, 2004. "Cost of Capital for Cross-Border Investment: The Fallacy of Estonia as a Tax Haven," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(1), pages 28-43, December.
    3. Khrystyna FOGEL, 2015. "The multistage nature of labour migration from Eastern and Central Europe (experience of Ukraine, Poland, United Kingdom and Germany during the 2002-2011 period)," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6, pages 55-81, December.
    4. Joanne Evans & Eleftherios Goulas & Paul Levine, 2007. "Military Expenditure And Migration In Europe," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(4), pages 305-316.
    5. Kristi Anniste & Tiit Tammaru & Enel Pungas & Tiiu Paas, 2012. "Dynamics of Educational Differences in Emigration from Estonia to the Old EU Member States," Norface Discussion Paper Series 2012017, Norface Research Programme on Migration, Department of Economics, University College London.
    6. Thiess Buettner & Johannes Rincke, 2007. "Labor Market Effects of Economic Integration: The Impact of Re-Unification in German Border Regions," German Economic Review, Verein für Socialpolitik, vol. 8, pages 536-560, November.
    7. Stepán Jurajda & Katherine Terrell, 2009. "Regional unemployment and human capital in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 241-274, April.
    8. Kristi Anniste & Tiit Tammaru & Enel Pungas & Tiiu Paas, 2012. "Emigration After Eu Enlargement: Was There A Brain Drain Effect In The Case Of Estonia?," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 87, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    9. Ondřej Glazar & Wadim Strielkowski, 2010. "Turkey and the European Union: Possible Incidence of the EU Accession on Migration Flows," Prague Economic Papers, University of Economics, Prague, vol. 2010(3), pages 218-235.
    10. Fries, Jan, 2014. "Age and skill bias of trade liberalisation? Heterogeneous employment effects of EU Eastern Enlargement," ZEW Discussion Papers 14-113, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Fertig, Michael, 2003. "The Impact of Economic Integration on Employment - An Assessment in the Context of EU-Enlargement," RWI Discussion Papers 7, RWI - Leibniz-Institut für Wirtschaftsforschung.
    12. Camilla Jensen, 2004. "Formal Integration: FDI and trade in Europe," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(1), pages 5-27, December.
    13. Raul Eamets & Epp Kalaste, 2004. "The Lack of Wage Setting Power of Estonian Trade Unions?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(1), pages 44-60, December.
    14. Yordan Kalchev & Valentin Goev & Vesselin Mintchev & Venelin Boshnakov, 2004. "Bulgarian Emigration in the Beginning of ÕÕI Century: an Assessment of Attitudes and the Profile of Potential Emigrants," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 3-30.
    15. repec:iab:iabzaf:v:39:i:1:p:143-148 is not listed on IDEAS
    16. Boeri, Tito, 2006. "Eastern enlargement, migration and Euro adoption," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 39(1), pages 143-148.
    17. Michael Fertig, 2003. "The Impact of Economic Integration on Employment – An Assessment in the Context of EU-Enlargement," RWI Discussion Papers 0007, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    18. Ramon Pacheco Pardo, 2012. "Leadership, decision-making and governance in the EU and East Asia: crisis and post-crisis," Asia Europe Journal, Springer, vol. 9(2), pages 77-90, March.
    19. Etienne Wasmer & Peter Fredriksson & Ana Lamo & Julian Messina & Giovanni Peri, 2005. "The Macroeconomics of Education," Sciences Po publications info:hdl:2441/9064, Sciences Po.
    20. repec:zbw:rwidps:0007 is not listed on IDEAS
    21. repec:spo:wpecon:info:hdl:2441/9064 is not listed on IDEAS
    22. Alexandre Janiak, 2008. "Mobility in Europe - Why it is low, the bottlenecks, and the policy solutions," European Economy - Economic Papers 2008 - 2015 340, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.

    More about this item

    Keywords

    Immigration; trade; transition; EU enlargement;

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business
    • J0 - Labor and Demographic Economics - - General

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